Solved: I surrendered a life insurance policy I paid on bi-wkly for 20 years investing over $14,000, I am getting a cash value of $4,200 do I have to still pay taxes on the $4,000 and what percentage do I pay on taxes?
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I surrendered a life insurance policy I paid on bi-wkly for 20 years investing over $14,000, I am getting a cash value of $4,200 do I have to still pay taxes on the $4,000 and what percentage do I pay on taxes?

This was done the first week of Feb. , 2017 so I want to hold back whatever money I will need to pay in taxes next year.
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New Member

I surrendered a life insurance policy I paid on bi-wkly for 20 years investing over $14,000, I am getting a cash value of $4,200 do I have to still pay taxes on the $4,000 and what percentage do I pay on taxes?

For a policy on which you paid the premiums, taking the cash value of the policy is not taxable income.

The cash value of the policy is essentially the amount of premiums paid in excess of the cost of purchasing the policy, which is why it builds over time.  As long as you (as opposed to an employer) paid the premiums, you are getting your own money back.

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New Member

I surrendered a life insurance policy I paid on bi-wkly for 20 years investing over $14,000, I am getting a cash value of $4,200 do I have to still pay taxes on the $4,000 and what percentage do I pay on taxes?

For a policy on which you paid the premiums, taking the cash value of the policy is not taxable income.

The cash value of the policy is essentially the amount of premiums paid in excess of the cost of purchasing the policy, which is why it builds over time.  As long as you (as opposed to an employer) paid the premiums, you are getting your own money back.

View solution in original post

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